Silicon Valley exec on regulating Facebook and why he keeps his kids away from screens

Chamath Palihapitiya runs a $2.5 billion venture capital firm in Silicon Valley and is a former Facebook vice president. His career has been defined by technology, so why does he limit his kids' screen time to zero?

"I want children who can make eye contact. I want children who know how to resolve conflicts with their peers. I want children who understand the dynamics of interpersonal relationships that are physical and tactile. I do not want children that only know how to interface with the world through a screen," he told "CBS This Morning" on Tuesday. 

Palihapitiya made headlines when he slammed his former employer last year, saying social media is "ripping apart the social fabric" in societies around the world. As the tech industry has come under pressure to deal with complaints about sexual harassment, data security, user safety and privacy, venture capital firm Social Capital -- of which Palihapitiya is the founder and CEO -- hopes to turn the tide of public opinion by investing in new tech companies that aim to solve "the world's hardest problems." Social Capital's portfolio includes file-sharing company Box, business application Slack and online survey company SurveyMonkey.

"I think what's happened in the last probably 10 years is particularly young people have lost faith in the institutions that were supposed to be solving these problems. And so when I took a step back at Facebook, I had a decision to make, which was to continue to stay there -- and I had a lot of success there -- or to take a lot of financial gains and re-allocate them to these kind of problems and say, well, if the EPA is not going to do something around climate, what can private citizens and what can technologists do to solve them?" he said.

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While Palihapitiya doesn't believe in regulating how people use Facebook, he said there are two things the social media giant must fix.

"All these social media sites allow us to confuse truth and popularity. That has to be fixed. Because every normal citizen has a right to know what is factual versus what is amplified by good actors or bad actors," he said. "The second thing is every single citizen of every single country of the world has a right to understand what data are they giving and what are they getting. So in that construct, there's probably some regulatory framework that makes sense."

What that framework looks like more specifically? It's hard to say. More broadly, Palihapitiya imagines there will be a major shift in online business models.

"Listen, the reality is, for the last 20 years, we've been living in a utopia. We all get things for free and we pay nothing for them, right? Now, if you for example bought a car and you were just given the car -- meaning it cost nothing -- and then the seat belts didn't work and the airbags didn't deploy, you'd have no recourse, because the car manufacturer would say, 'Well, hold on a second, I gave you a free car, right?' If you bought milk, you can expect it to be pasteurized. If you're given milk and it makes you sick, you have no recourse," he said. "So similarly on the internet, we have to ask ourselves, if you are not paying for something, you are probably part of the product -- not the consumer or customer who has rights by buying a product."